Automotive Insights 01.2013 - Roland Berger

Strategy . Supplier/OEM Relationships
Now more than ever, the automotive industry
is facing tough challenges all over the world:
the capacity crisis in Europe is still enduring,
different emerging markets are gaining a
rising importance, and politics and governments all
over the world are working on tougher regulations on
carbon emissions and further environmental protection
measures.
Apart from that several groundbreaking technological
improvements are going to change the industry deeply.
They have the potential to shift the balances of power,
which have been tared for many years: Just think about
the beginnings of smart mobility, connected vehicles
and powertrain electrification. Last but not least,
the automotive market is faced with an explosion of
segments and models.
It's no surprise that manufacturers will not succeed
in this changing environment without the help of their
suppliers. But after years of intense competitive pressure,
unbundling and asking for systematic price reductions
and productivity gains, the rules of collaboration will
change. That's a disruptive and challenging cultural
effort for both of them.
There is an urgent need to reinvent the traditional
relationship between manufacturer and supplier.
This process can work in various ways and depends
on the respective players: It can include completely
new approaches, such as shared cost structures,
involving suppliers in pre-development phases, coinnovation,
shared target-cost design approaches, on-site
development teams, volumes visibility and commitment
or even long-term agreements. Some good illustrations
of these new approaches already exist:
• Ford's "Aligned Business Framework" (ABF):
Launched in September 2005, the network consists
of a diverse group of automotive suppliers that play
an important role in Ford's global sourcing plans.
They help the Ford Motor Company to improve
the quality and to reduce the costs of development
and production. The "Aligned Business Framework"
aims to promote mutual profitability and technology
innovation.
• The "Excellence de la Relation Fournisseur" of the
French PSA Group is a comparable network, founded
to strengthen the relationship between the OEM and
its most important suppliers elected as strategic.
This deep cultural shift will revolutionize ways of working
together, as these collaborative approaches require
much more transparency and confidence on both sides.
Seven
dimensions
of
collaboration
Suppliers and manufacturers can leverage their
relationship throughout the entire vehicle lifecycle,
from innovation to after-sales. We have identified
seven value-adding dimensions for suppliers to reinvent
their collaboration with OEMs.
1
Enhance customer perception
The idea: Customer perception of the vehicle is a
complex alchemy that manufacturers have been trying
to understand for years. The scope of perception is
wide: Just think about style, interior atmosphere, road
behavior, safety, robustness, comfort, and the sound of
the engine.
Finding the right balance seems to be more of an art
than a science. Historically, this has been an area almost
exclusively reserved for OEMs. But today, suppliers can
play a role by contributing very specific expertise. OEMs
rely on this market knowledge in making their final
decisions.
The example: Human Machine Interfaces (HMI),
which form the heart of the connection between
vehicle and driver, are the results of efforts by very
new suppliers, even those outside the traditional
automotive industry. Another example would be the
sound of future cars: exhaust noise, a key component
in overall engine perception, can be smooth, sporty,
quiet or loud. Exhaust suppliers have built up unique
expertise in providing a consistent sound signature
to OEMs across their entire range of models.
14 Automotive Insights | 01.2013